Assume Weak Growth in Aggregate Demand Keeps the Economy Below

question 85

Multiple Choice

Assume weak growth in aggregate demand keeps the economy below potential GDP,so unemployment rises but inflation falls.This explains the ________ slope of the short-run Phillips curve.

• A)positive
• B)negative
• C)zero
• D)infinite

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at each possible price level.

Cost Data

Information regarding the expenses incurred in the production, operation, or undertaking of a project, activity, or product.

Monopolistically Competitive

An arrangement in the economy where countless firms are selling products that look similar but are unique, thus permitting them a slight advantage in the market.

Product Differentiation

The method of differentiating a product or service to appeal more to a specific target market.